Leverage KPIs to maximize operational efficiency

Performance KPIs are important tools for achieving clarity, enabling organizations to monitor their performance, make data-driven decisions, and align their strategies with overarching business goals.

At Propel24, Rod Cherkas, Mary Poppen, and Tony Peck explored how leveraging KPIs can provide valuable insights, guide strategic decision-making, and ultimately drive success.

Mary Poppen is a renowned thought leader in customer and employee experience.  With over 20 years of expertise in customer delivery, business consulting, and executive leadership, she is currently the President and Chief Customer Officer at Horizons. She helps companies center their operations around both employees and customers. Mary is also an educator at Michigan State University and the author of the acclaimed book Goodbye Churn, Hello Growth.

Rod Cherkas, the CEO of Hello CCO, is a leading global consultant and advisor to Chief Customer Officers and their post-sales teams. With a robust background as a post-sales executive at Silicon Valley giants like Intuit, RingCentral, Marketo, and Gainsight, Rod recently published the bestseller The Chief Customer Officer Playbook. His consulting firm helps leaders improve operational outcomes, sharing insights and best practices from his extensive experience.

Tony Peck, our session moderator, brings over two decades of experience in leading professional services and management consulting organizations. As the VP of Customer Success at Big A, Tony specializes in data observability and anomaly detection for enterprise customers. He has scaled global teams for high-growth tech companies, assisting both public and private clients in addressing critical strategic programs.

Together, these industry experts explored how to leverage KPIs to maximize operational efficiency in professional services teams, sharing best practices and lessons learned from their distinguished careers.

Here are all the insights summarized from their panel discussion.

Macro-economic influences on KPIs

Over the past 12-24 months, industries have experienced significant changes due to macro-economic factors like rising interest rates. These changes have made borrowing and raising capital more expensive, pushing companies to rely on existing resources and balance revenue with expenses. As a result, there's a heightened focus on cost-cutting, productivity improvement, and margin optimization.

Professional services and implementation organizations are adapting to these changes by aligning revenue from services with allocated work, leveraging self-service options in onboarding, and monetizing through fee-based onboarding programs. This approach is crucial for maintaining financial stability and maximizing the impact of professional services.

Changes in organizational dynamics with peers, leaders, and teams

In an environment where acquiring new customers is increasingly challenging, ensuring the success of existing customers is essential. Teams need to work closely with executives to align the priorities of professional services with overall company goals. Balancing organizational metrics with company-wide objectives, such as top-line growth and customer acquisition, is key to driving comprehensive success. They have realized that a smooth onboarding experience significantly boosts customer retention rates, highlighting the value of professional services and onboarding teams. This trend underscores the need for metrics that drive these positive outcomes.

Meanwhile, early startups are leveraging partnerships to accelerate sales and delivery, promoting business growth and scalability. This shift highlights the strategic value of collaboration and partner ecosystems.

Transitioning macro trends into boardroom conversations

Boards and CEOs expect certain information from their PS leaders, but they also value insights that go beyond the usual metrics. It’s important to present key headlines and data-driven stories that illustrate the impact of professional services on revenue growth, profitability, and customer satisfaction. This approach captures their attention and highlights how your work contributes to the overall business.

Revenue growth and profitability are always top priorities for boards, so it’s essential to connect billable hours, project utilization, and margins to these outcomes. Additionally, discussing customer health and satisfaction, along with proactive measures to address potential issues, shows strategic foresight.

Unexpected insights, such as market and competitive landscape analysis, can also be valuable. Highlighting what competitors are doing and how customer demands are evolving demonstrates a broader understanding of the market and strategic planning capabilities.

Remember: Storytelling is key when presenting to the board. While metrics are important, stories resonate more. For example, illustrating a successful onboarding process that led to significant growth or showcasing how add-on services turned around a customer can demonstrate the strategic value of your work.

Aligning revenue streams with business evolution

Connecting one-time revenue from services to recurring business revenue is crucial. Aligning your commentary with the business needs and having a roadmap or maturity model for the services team ensures that their metrics evolve in sync with the business.

Services teams have diverse objectives. For teams without utilization and revenue targets, emphasizing customer impact is crucial. Metrics such as project start times, adherence to schedules, streamlined onboarding, and customer satisfaction are pivotal for demonstrating effectiveness.

Other useful metrics include monthly tracking of revenue post-implementation, feature adoption linked to retention rates, and project start-to-completion times. These metrics enhance efficiency and process predictability, reflecting well on organizational management.

Beyond go-live, it’s essential to have milestones for value realization. Regularly checking in with customers about perceived value and aligning with success criteria can enhance customer satisfaction. Breaking down the go-live process into stages can yield early wins and keep customers engaged.

Financial metrics and operational efficiency

For teams with revenue and margin goals, focusing on utilization metrics is important to understand resource investment. Tracking absolute and variability in utilization can indicate process stability. Consistent metrics demonstrate to leadership that resources are well-managed.

Segmenting utilization and profitability by customer segment can inform decisions about service changes, self-service models, or partner delivery. Adoption targets by product line and cost of service as a percentage of new revenue are also critical metrics for larger companies.

Tracking the cost of service and its correlation to new revenue helps in understanding the financial impact of services. Advocacy metrics, such as customer referrals, can highlight the value of the services team.

Best practices for data accuracy and governance

• Define key metrics aligned with business objectives: Start by defining metrics that directly support your business goals.
• Implement data management protocols: Ensure correct data collection and visibility for accurate reporting.
• Establish governance framework: Clearly define roles for monitoring data accuracy, validating data, and training the team on data handling protocols.
• Leverage data for informed decision-making: Use available data to drive informed decisions, even with limited datasets, to influence business strategy effectively.
• Role of services operations: Assign a dedicated role for services operations to set up processes, generate reports, and manage capacity effectively.
• Track activities consistently: Set clear expectations for team members to track their activities, ensuring consistent metric reporting.
• Continuous improvement through assessment: Use estimation standards and ongoing assessments to enhance operational efficiency and accuracy.

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